Sustainability is not simply a compliance issue for modern businesses, nor is it just “window dressing” for public relations purposes.
In 2015, sustainability can be a driver for a raft of performance issues, which combine to deliver better financial results, greater shareholder value and enhance staff engagement.
The idea has moved well beyond “triple bottom line” reporting, where companies issue a separate report from the perspective of their sustainability performance, to a concept permeating every aspect of the way an organisation behaves.
Sustainability in business today encompasses decisions on the environmental rating of business premises, decisions about procurement, supply-chain management and investment, decisions on corporate citizenship, and the ultimate measurement of carbon emissions.
Previously many of these issues may have been seen as a compliance burden. Today though, the world has evolved to the point where an issue is an opportunity to enhance the business and improve performance.
A more energy efficient business premises means lower power costs. A fleet of hybrid vehicles brings with it a reduced fuel bill. Rainwater tanks cut down the bill from the water company. A policy to work with more soft copy documents means less paper is used, saving on purchasing but also on waste disposal.
Going digital in areas such as financial management, in fact, delivers management and performance efficiencies and reduces the demand for paper. BPAY View, for example, sends bills and statements straight to your online bank.
Sustainability and the bottom line
A number of studies have established the link between sustainability and improved financial performance.
At the Harvard Business School, researchers compared a matched sample of 180 US-based companies, 90 of which were classified as “high sustainability” with the balance described as “low sustainability.” The criterion was based on a raft of policies across human resources, the environment, and corporate governance and citizenship.
Over an 18-year period, the high-sustainability companies had dramatically outperformed those with low sustainability in terms of their sharemarket performance, and by accounting measures.
The study found that the annual above-market average return for high sustainability companies was 4.8 percent higher than the other sample, in addition to delivering better return on equity and return on assets.
Invest in Change
Sustainability does require an investment in time and energy, and can mean some tough decisions and radical changes to the organisation. And because each organisation is different, sustainability can mean different things in different companies.
Some of the changes might be incremental; others may be “big ticket” capital equipment and technology items that pay off over the longer term.
The best way to start is with a rigorous audit of all areas of business activity, and how sustainability might change the way things are done. Savings in one area might result in added costs in another: are these justified or is there another way to solve this problem?
According to Manufacturing Skills Australia, most enterprises that implemented sustainability measures saw direct benefits across a range of areas. Not least of these is the ability to target opportunities in “green markets,” which are estimated to reach a value of US$2.7 trillion per year globally by 2020.
Since its launch, BPAY View has saved over 187 million pieces of paper, which equates to circling the Sydney Harbour Bridge with paper more than 23,185 times.
World Environment Day, on June 5, was traditionally to focus on the environment, and the conservation of natural resource and animals.
In 2015, the focus has widened significantly. This year, it is an opportunity for businesses of all sizes, and from all sectors, to focus on how sustainability can not only benefit the environment, but also drive their business success.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
Published by BPAY Pty Ltd. BPAY is offered by over 150 Financial Institutions. Contact your Financial Institution to see if it offers BPAY and to get the terms and conditions. This is general advice – before using BPAY please review the terms and conditions and consider whether BPAY is appropriate for your personal circumstances.